Tuesday, April 19, 2016

Dear Donald Rumsfeld

I am writing an open letter in reply to your open letter to the IRS. You seem somewhat flummoxed about many complex tax matters and I sympathize entirely. Let me help.

Tax brackets are actually not complicated. It's a chart. We all learned to read charts in middle school. Ditto with percentages. You need to know both in order to play Dungeons & Dragons.

What's actually complicated are all the loopholes the rich write into the tax code to benefit themselves.

Did you declare your doohickey on your whatchamacallit investment? It's taxed slightly differently than the money from your transnational thingamajig holdings. Most folks have no idea what these things are. But if we are deducting our student loan or mortgage interest, we are asked a barrage of questions about all the whatchamacallits and thingamajigs that we don't have and probably never will.

At least we are pretty sure we don't. I did not know I was pre-diabetic until my doctor told me. Maybe we do have doohickeys to declare that we do not know about. And that possibility understandably terrifies us.

But tax brackets are not rocket science. And even if they were, that would not concern you because you can afford an accountant to do your taxes for you. Your motives are different than mine because your situation is different. You are trying to pay less taxes whereas I know I am getting money back. You don't need to wrestle with any complexity yourself, but I do. I strongly doubt you have much in common with the millions of average Americans you mention in your letter.

This is probably why you advocate a flat tax which would tax rich and poor alike at the same percentage rate. Many opulent conservatives support it arguing that progressive taxation is unfair and un-American.

But it seems that a couple of founding fathers disagreed. Both the Toms - Jefferson and Paine - explicitly advocated progressive taxation. In a letter to James Madison, Thomas Jefferson wrote about conditions in pre-revolutionary France. Sounding a tad like Bernie Sanders, he remarked, "The property of this country is absolutely concentered [sic.] in a very few hands." Like many other founders, Jefferson felt a rough economic equality was essential to a just society, but he stopped short of land redistribution or advocating absolute equality. His solution was to outlaw primogeniture - the traditional practice of leaving all property to the eldest son - and (drum roll, please) progressive taxation:

The descent of property of every kind therefore to all the children, or to all the brothers and sisters, or other relations in equal degree is a politic measure, and a practicable one. Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.

Thomas Paine was also against primogeniture and for progressive taxation - although he wanted to end primogeniture throughprogressive taxation. In The Rights of Man, he devised a tax plan that would make vast estates prohibitively expensive thereby compelling wealthy families to break them up into smaller holdings in order to qualify for a lower rate. "It will reach the point of prohibition by a regular operation, and thereby supersede the aristocratical [sic.] law of primogeniture." As Paine explained:

According to this table, an estate cannot produce more than £12,370 clear of the land tax and the progressive tax, and therefore the dividing such estates will follow as a matter of family interest. An estate of £23,000 a year, divided into five estates of four thousand each and one of three, will be charged only £1,129 which is but five per cent., but if held by one possessor, will be charged £10,630.

In other words, Paine advocated using taxation to destroy the aristocracy. This might be why conservatives prefer Edmund Burke - the guy who Thomas Paine wrote The Rights of Man in reply to.

Granted, Jefferson and Paine made their proposals for England and France, not America. This was because our government was still giving away Native land and would continue to do so for another century. England and France had no such frontier and breaking up big estates could only help so much. At the close of his letter, Jefferson said America was not yet at that point. But now we are. The frontier closed a century ago. When this happened, historian Frederick Jackson Turner famously argued that the frontier had shaped America's egalitarian ethos and feared what the absence of the frontier might bring. This was when Americans began to look toward government to safeguard equality. It was when the Progressive Era began, bringing with it demands for greater democracy - and the progressive income tax. Turner's Frontier Thesis may have missed the mark, but back then people believed it. And it was consistent with what Jefferson and Paine believed, which is what matters here. Contrary to conservative canards, America has always practiced government assistance. It's just that the "handouts" were originally land. Then it ran out.

But I am sure you are brushed up on your Burke, etc. and therefore already familiar with this conversation.

Go back to playing solitaire with Winston Churchill. It will keep you out of trouble.